Almost there...

Due to regulatory restrictions regarding the distribution
of financial research, this report is restricted to a specific
region or investor type. Get access to exclusive reports
by answering the questions below.

Are you a professional investor?

Select your country

Create a free ResearchPool account to access full reports, get a personalised dashboard and follow providers or companies

MOSL: UNITED BREWERIES (Neutral)-Results better than feared, margin pressures likely due to GST

Net sales rose 7.0% YoY (est. of -8%) to INR16.7b in the quarter. Despite the highway ban in 1QFY18, volumes were flat YoY, and importantly, UBBL expanded its market share by 150bp YoY. Quarterly sales growth was commendable, given that April sales were down in double-digits YoY. EBITDA grew by 9.4% YoY to INR3.18b (est. of INR2.25b) and PAT by 10.1% YoY to INR1.62b (est. of INR1.17b).

Gross margin shrunk 210bp YoY to 52.7% due to an increase in barley and sugar prices YoY. However, EBITDA margin improved 40bp YoY to 19.0% (est. of -300bp to 15.6%) due to a decline in other expenses (-210bp YoY) and staff costs (-40bp YoY).

Management call takeaways: (1) From 83,000 outlets selling beer on 1 April, the number of outlets open at end-June was 59,000 (currently 62,000). There was thus higher throughput from existing outlets in 1QFY18. (2) Maharashtra witnessed a 20% decline in volumes in 1QFY18, while Kerala saw 40% impact. The situation is gradually improving MoM. Karnataka, which had more time to prepare for the highway ban, saw much lesser impact than these two states.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

Sign-up for free to access full reports immediately

Email Address*

Choose Password* ( 6 or more characters )

Due to regulatory restrictions regarding the distribution of financial research, this
report is restricted to a specific region or investor type. Get access to exclusive reports
by answering the questions below.